Philippine economic news and market recap: August 25-29, 2008
September 1, 2008
Update on the Philippine market and other economic news, for the week ended August 25 to 29, 2008.
Philippine GDP growth slows down to 4.6%
The growth of the country’s gross domestic product (GDP) slowed down in the second quarter of 2008 to 4.6% from 8.3% in the same period last year.The decline was primarily due to a contraction in the industry sector brought about by the contraction of mining and quarrying and also in the services sector which was adversely affected by rising inflation. The gross national product (GNP) also went down from 9.8% in the previous year to 5.5% in the second quarter.
June imports up by 12.7%
Total imports reached US$5.30 billion in June, up 12.7% from the previous month. Payments of electronic products, which comprise the largest share of imports, declined by 20.3% but this was offset by significant increases in other industries. Import payments of mineral fuels, lubricants and related materials, which had the second-highest share of total imports, surged by 75.7%, while cereal and cereal preparations, the third-highest import, jumped by 162.7%. Because imports continue to grow faster the country’s exports, the balance of trade deficit for the first half of the year widened to US$3.93 billion from US$906.00 in the same period last year.
BSP raises key interest rates by 25 basis points
The Bangko Sentral ng Pilipinas (BSP) last week raised key policy interest rates by 25 basis points, and consequently, the overnight borrowing rate is now 6% while the overnight lending rate is 8%. The latest rate increase is the BSP Monetary Board’s third straight increase in recent months, for a year-to-date total increase of 100 basis points. The tightening of monetary policy was primarily due to rising inflation in the first half of 2008.
Stocks up by 1.3%
The Philippine Stock Exchange Index (PSEi) ended the week higher by 34.91 points or 1.3% at 2,688.09 points from last week’s 2,653.18 points. Jollibee Foods Corporation (JFC) led the week’s gainers among companies included in the PSEi, rising by 10.1%. Second highest gainer was Megaworld Corporation (MEG) which rose value by 9.0% followed by Manila Water Company, Inc. (MWC) which increased by 4.4%.
Source: Philippine Stock Exchange
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